Software Asset Management Professionals

Add-on vs. User Subscription License

Posted on November 16, 2015June 25, 2024 by Ben Tight

Office 365 Addon Or Subscription? What’s the Difference?

When most people hear Office 365, they think of what you call user subscription license or USL.

Everybody thinks it’s a subscription so they don’t own a perpetual license anymore. It’s just a monthly subscription that you pay for annually, upfront typically, but it’s a monthly subscription.

Moving from an Enterprise Agreement

If you’re moving from your EA that’s renewing, where you own a license and have active software assurance, you would move to these USLs or these subscriptions, and give up your perpetual licenses or the rights to them in the future.

In that case, the EA renews, or if it renewed today they would be entitled to say Office 2016, Exchange 2013 and SharePoint 2013. They would move to the subscription licenses and they wouldn’t own anything.

So three years from now, and they didn’t go to the Cloud or decide they want to come back on-premise, they don’t own licenses for what’s current. They only own the licenses for what was frozen at their renewal. So the user subscription license is a pure subscription. It’s also user-based. So, with Office, for instance, you would count Office based on devices, the number of laptops, desktops on which it’s deployed. Whereas, USLs are all to the users.

Add-ons for CALs

The add-on is basically a concept where I have active software assurance on my CALs, whether that be the Core CAL or the ECAL, and Office and I add an Office 365 subscription on top of that. It may seem like it’s a simple difference, but there’s a number of actual subtle differences that may make a lot of sense for organizations.

For instance, If I renew and then I renew my software assurance on Office and my CALs and then do the Office 365 add-ons, I can migrate my users to the Cloud, nothing changes there, I still have access to Exchange, SharePoint, and Skype in the Cloud; but, I’m keeping my perpetual licenses. Three years go by at the end of that contract I didn’t move to the Cloud or I decided it’s not working and I want to come back on-premise. Guess what? I own all my licenses. I own the most current versions and I could walk away at that point in time. Whereas under the USL I own nothing so I’d have to re-buy licenses if I wanted to come back on-premise.

Getting the Most From Your Office 365 Licensing

So, it’s a way to hedge your bets if Office 365 doesn’t deliver on the promise or something changes, it’s a way to get out of it. The other thing is it could be a way to hedge your bet three years down the road. If I had a USL and Microsoft gives me a great deal what happens if three years from now I don’t have any licenses, I’m on these subscriptions, Microsoft says I’m not giving you any discount anymore and we’ve upped the price 10%? Now all of a sudden, I’m sitting in a position where my price has gone up 30% or 40% and I have no leverage. So, it’s a way to continue to maintain leverage as well.

Related: Save Money on Microsoft 365

Microsoft Office 365 How Do You Know What You Really Need?

Posted on October 15, 2015June 26, 2024 by Ben Tight

Office 365 licensing is surrounded by a great deal of confusion. What is Office 365? What plan do I require? Do I require the full suite? Should I purchase User Subscription Licenses or Add-0ns? It is no secret that Microsoft is aggressively promoting and selling the service. The key question to ask is what is Office 365? The most common answers are related to Office 365 E3. E3 contains Exchange Online, SharePoint Online, SkypeforBusiness Online and Office Professional Plus. Most people are unaware that you can purchase a single service such as Exchange Online (YES, even in your EA) instead of the bundle.

My experience is that most people relate a desire to move to Exchange Online to purchasing Office 365 E3. When asked why they are considering Office 365 the answers range from “we want to reduce our email storage costs” or “we plan to move our mailboxes into the cloud”. Other Online Services seem to garner less interest (although there seems to be a bit more interest in SharePoint Online lately).

What is shocking is how many organizations interpret a desire to move email to the cloud as a need to negotiate an Office 365 E3 deal with Microsoft. Most simply do not realize that alternatives exist (such as purchasing only Exchange Online). It could cost millions more if these options are not considered.

If considering a move to the cloud ask the following questions (these are just a few examples):

What Services am I really looking to purchase? Is it just Exchange Online?
How quickly will a migration occur? How will users be moved?
Are all users the same? Do they all require E3? Do they all require features of Exchange Online Plan 2?
What contractual rights exist? What risks or benefits does purchasing one have over the other?
Do User Subscription Licenses (USL) or Add-Ons make sense?
Have I evaluated the benefits and risks of USLs to Add-Ons?

What about Office? How does this factor into the decision making criteria?

The short answer is it shouldn’t. This surprises many people. Office is a prominent part of the E3 product and does deserve consideration. An evaluation of purchasing Office 365 Office Professional Plus versus perpetual licenses for Office Professional Plus should be conducted. Consideration for comparing “Run to Click” to on premise Office, understanding the value/risk of Microsoft pushing updates, the value (if any – it is surprising how often there isn’t any) in user based Office licensing, VDI or BYOD environments and many others.

If negotiating an Office 365 purchase, review the options and consider proposals for:

Exchange Online instead of E3
Renewing SA and purchasing add-ons instead of USLs
Purchasing licenses through an Office 365 transition versus upfront commitment
Buying as you go versus all upfront

It is surprising what can be learned by asking these questions, not to mention the cost savings you may see.

Why Engage a Microsoft Licensing Negotiation Expert?

Posted on May 8, 2015January 28, 2025 by Ben Tight

Why Engage a MetrixData360 Microsoft Licensing Negotiation Expert?

At MetrixData360 we specialize in helping organizations negotiate more effectively with Microsoft in both audit and volume licensing agreement renewal situations. Our licensing experts know the best-proven ways to get results and lower your Microsoft costs. Yet some organizations still hesitate to engage third-party experts. We understand that organizations often have talented, intelligent and experienced people who are responsible for these sorts of Microsoft negotiations, but there are significant limitations on what any internal person can know:

They will only have the opportunity to negotiate once every three years
The licensing programs will likely have changed since the last Microsoft contract
Product lines will have changed

In my mind, I often compare a Microsoft negotiation to buying a car. I’m the type of person who researches everything. When I meet with the salesperson I’m as well prepared as anyone could be. Then we start talking numbers. I ask for the sorts of discounts that I have read on the internet are possible. They tell me no and counter with something far less substantial. We go back and forth and eventually a deal is done but I never feel great about it. I feel like at some point I lost control of the negotiation. Furthermore, other than walking away I did not really know what levers I could pull to drive important concessions. At the end of the day, I don’t know that I really received a good deal and in the back of my mind, I have a nagging feeling that I may have paid too much. I realize that comparing an individual buying a car is very different from a company negotiating a multi-million dollar Microsoft licensing contract. However, despite the differences in scale/scope I strongly feel like this is the way most of us feel during and after they conclude a Microsoft negotiation in either an audit settlement or a contract renewal situation.

How a MetrixData 360 Expert can help in a Microsoft EA Contract Renewal

In our experience most organizations take the following path leading into a Microsoft EA contract renewal/negotiation. They make a list of the products and quantities they require on the new agreement and consider what products can possibly be dropped from the agreement. Once this list is finalized, the Microsoft negotiation typically consists primarily of driving the deepest possible discount off of a set pricing level. The challenge is that in our experience, Microsoft does not and cannot discount their products to the same level as most other software companies. We find many organizations also will request concessions from Microsoft that they (Microsoft) are simply unable to grant. The end result of negotiating in this manner is frustration and disappointment. Kind of similar to my car buying experience.

Engaging a MetrixData360 licensing expert changes the process dramatically and puts you in control of the Microsoft negotiation. Our experts have negotiated over a billion dollars of Microsoft contracts and we know the process inside out. In close consultation with you, we will work to understand your technical requirements and negotiation objectives. We will build multiple licensing models and provide a risk analysis of each. Finally, we will coach you through the negotiation process. The way that we drive costs out of renewals is by focusing on the structure of the contract and driving contractual changes that are important to you. These are small requests that can make a big impact on the costs. I have had calls with clients in which we were able to help them to achieve a concession in a single meeting which they had been unsuccessful in negotiating the last two contract negotiation cycles.

Find out more about the MetrixData 360 process and what to expect when you hire us!

How a MetrixData360 Licensing Expert can help in a Microsoft Audit/Software Asset Management (SAM) Engagement.

When most people are faced with an auditor who is presenting their deployment data and showing a sizeable gap in their software licensing, they don’t know how to push back, even when the data being presented just feels wrong. The auditor will usually come back with a statement such as, “well this is your deployment data and this is what we have confirmed is deployed.” They may then point to terms and conditions in your various contracts that back up their position. Sounds pretty hopeless doesn’t it?

Over the past few years Microsoft audits/SAM engagements have become much more common and our experts are helping clients with them on a daily basis. This day to day experience with Microsoft audits ranging from clients with hundreds of thousands of desktops to a few hundred means that we understand the process inside out. This experience allows us to streamline the whole process for you and avoid wasted cycles. Our experts also know what your contractual rights are and lets you know when you are in a position to decline the auditors’ demands. Without proper guidance, an innocent data request from an auditor could cost you huge dollars if you are unaware you could challenge the request. Microsoft audits/SAM engagements also tend to be productivity black holes which serve to waste the time and energy of your people. This is where you need a MetrixData360 licensing expert who can surface the terms and conditions which will negate the ones the auditor is basing their case on. Our experts know how to negotiate the most favorable settlement possible. We have successfully saved our clients millions of dollars and hundreds of hours of time.

When Should I Contact MetrixData 360?

We can engage at any point in either the Microsoft EA renewal or Microsoft audit/SAM process but its always ideal to be involved early. Our Licensing Negotiation Experts are always happy to have an introductory call with you to see how we can help you!

Is Office 365 really being deployed?

Posted on March 16, 2015July 4, 2024 by Ben Tight

Insider Insights: How MetrixData360’s Licensing Specialists Decode Microsoft Enterprise Agreements and Office 365 Deployments

MetrixData360 negotiates hundreds of Microsoft Enterprise Agreements (EA) on behalf of its clients every year. As a result, our licensing specialists have a unique insight into the way enterprise organizations are actually using and deploying Office 365. Microsoft has been reporting robust sales numbers for Office 365 (microsofts-q1-shines-office-365-leads-results) but are enterprise businesses actually deploying it? The observations I am about to share with you are based on MetrixData360’s experiences with our clients and partners and are specific to Office 365 cloud based deployments. I make this distinction as these observations do not take into account 3^rd party partner hosted solutions as this is not Office 365 (just traditional hosting). Continue reading “Is Office 365 really being deployed?”

Why Is There An Army of Microsoft People in my Boardroom for an EA Renewal Meeting?

Posted on February 23, 2015June 26, 2024 by Ben Tight

At some point in a Microsoft Enterprise Agreement (EA Renewal) negotiation, a physical meeting usually takes place and a literal army of Microsoft badge wearing folks fills your boardroom. Who are all these people with job titles that are generally two or three letter acronyms? It’s helpful to really understand who these folks are and what will be important to them in the negotiation.

In simplified terms, your whole Microsoft account team is compensated on the sales of products and services, attainment of a growth number and also for the attainment of scorecard metrics. These scorecard metrics generally include bonuses for the sale of certain quantities of key products that Microsoft has determined are strategic at a corporate level. It can also include punitive measures for account teams which fail to meet their scorecard metrics. This may explain on certain occasions the baffling behavior by an account team in which they appear laser focused on continually positioning a solution for which the client has no particular interest or actual business needs. Odds are it is critical to the account team’s scorecard.

Optimizing Enterprise Account Teams: A Look into Microsoft’s Virtual Team Structure

Microsoft arranges their Enterprise Account Teams into virtual teams. At the simplest level, these are comprised of an Account Manager (AM) and various subject matter specialists. As you would expect, the AM is responsible for the all up management of your account and is also responsible for delivering a sales number to Microsoft. As a result, this person is concerned with every product line and upsell opportunity on your renewal.

Closely linked with them will be your account Technology Specialist (TS). The TS is responsible for the more general technical aspects of the sales process. In fact, my former TS (I was an AM) would often describe himself to our clients as, “his (referring to me) technical conscience” which was a very accurate way of explaining how we worked together. Together the AM and the TS form the core of the account team.

Surrounding this team will be various Solution Specialists. These are presales resources that bring a certain level of technical expertise coupled with sales expertise around a specific Microsoft solution(s) such as Office or SQL Server. It is important to understand that these roles are only concerned with ensuring that the product lines they represent are attached to the new agreement. Behind the scenes, there may be some active politicking going on to make sure that the AM and TS view their products as strategic to the sale so they have a seat at the table.

Unveiling Microsoft Aspirational Models: Insights from Licensing Specialists in Renewal Meetings

In a renewal meeting, the team will likely include a Licensing Specialist (LS) who is often the only Microsoft person at this meeting who has anything more than a rudimentary understanding of how the products are licensed. They will have worked (possibly with your reseller) to create a series of licensing models that they will present to you. These models will commonly include some variation of renewal of your current state and then a series of models that build on that. I like to call these additive models “Microsoft Aspirational”.

Occasionally the meeting may also include a Sales Manager or Sales Director to whom the account team reports to. If this person is present, it can potentially create a new dynamic in the discussion. They may be present for a variety of reasons ranging from demonstrating Microsoft’s commitment to you, assessing their account team, helping to “seal the deal” or something as simple as just actually meeting with a client for a change. Regardless of the reason that they have joined the meeting, they are sometimes able to take a different view of the situation. They are generally less concerned with the granularities of your EA as they are more concerned about an all up regional number. This sometimes allows them to step back from your deal and take a bigger picture view. It’s also worth noting that among this group they are the only individuals who have any real ability to influence anything beyond basic concessions.

In our experience it’s very important that you set the stage with the account team early in terms of expectations and direct your requests to the right Microsoft person. This sets the tone for the negotiation and does not need to be confrontational. We understand that Microsoft is a strategic vendor for most of our clients and you will want to have a strong and positive relationship moving forward. MetrixData360 specializes in helping you to understand how to ask for concessions in language that the account team will understand and help you to avoid asking for things they cannot give you. To arrange a free 30-minute consultation with one of our Microsoft negotiation experts, please call or email us today.

info@metrixdata360.com

905-854-0222

Should You Maintain Software Assurance on Visio and Project?

Posted on January 20, 2015January 23, 2023 by Ben Tight

When one approaches an Microsoft Enterprise Agreement renewal its important to understand if money is potentially being wasted to maintain Software Assurance (SA) on non-critical applications. Usually, the first renewal quote your licensing partner will provide to you will be a renewal of all the Microsoft products you own on your current agreement. Clients usually focus on big dollar products like Office, Windows and SQL Server, which is the prudent thing to do. Having said that, it’s easy to overlook products like Visio and Project and just allow their SA to renew. Continue reading “Should You Maintain Software Assurance on Visio and Project?”

Should you maintain Software Assurance on Microsoft Office?

Posted on November 28, 2014July 4, 2024 by Ben Tight

Tell me if this sounds familiar… You embark on the Microsoft Enterprise Agreement (EA) and you sit down to review your renewal options on your Microsoft Enterprise Agreement. A cursory glance at the pricing models will tell you that Software Assurance (SA) on Office is one of the largest dollar line items on the agreement. A discussion quickly breaks out among your team as you debate the value proposition of maintaining SA on Microsoft Office. Lets closely examine the SA benefits, renewal options and a potentially creative solution.

So what does Software Assurance on Office Professional provide to your organization?

Benefit	Details
New Version Rights	Rights to new versions of Office as they are released.
Planning Services	Assistance from Microsoft or Microsoft Partners to help plan deployments to the latest version of Office (Cloud or on premises).
Technical and End-User Training	Online or classroom training for end-users or IT Professionals.
Home Use Program	Allows end-users to purchase a heavily discounted copy of the latest version of Office for use on a home computer.
24 x 7 Problem Resolution Support	Telephone technical support.
Extended Hotfix Support	Non-security product fixes on a per customer incident basis.
Multi-Language Pack	Deploy a single Office image with 40 user interface languages.
Office Roaming Use Rights	Allows end user to access their Office software on their virtual desktops from third party devices.
Spread Payments	Split payments over the term of the EA.
Step-up Licensing	Migrate from a lower level edition to a higher-level edition such as Office Standard to Office Professional.

In our experience, the SA benefit that sparks the most strenuous debate is New Version Rights. A client coming up to a renewal owns the rights organization wide to the most current version of Office Professional which is great! The challenge is that most organizations have deployed/standardized on previous versions and do not plan to move forward to new versions for at least a few years. In this case, the organization also already owns the perpetual rights to the most current version of Office released (regardless of whether they have deployed it or not). At first glance it would appear that the answer is to cancel SA on Office and move forward but unfortunately its not that simple.

You’ll usually next be presented with models showing that if you do not renew SA you will have to rebuy the underlying License (L) in order to put SA back on your licenses in the future. Basically you can only renew SA on licenses that have active SA on them. After a break from SA you would have to purchase the license and SA all over again. In general, these models will typically show that you will need to take a 4+ year break from SA in order to justify the financial value of the break and this is correct under the traditional EA program.

We think that we can all agree that costs aside, maintaining SA on Office is desirable due to the security and peace of mind that it provides. The problem is that the cost is significant.

An alternative model is to take a break from SA for a period of time and then re-enter into SA coverage under the Office Professional Plus User Based Subscription licensing model. While you do forfeit perpetual licensing rights, it allows you to re-enter at SA pricing without having to rebuy the underlying license again. Furthermore, because it is a subscription model you only purchase what you need and when you need it.

For example, a organization with 2000 qualified devices that renews their SA under a traditional EA would look something like this:

Product	Year 1	Year 2	Year 3	Year4	Year 5	Year 6	Year 7
Office Professional SA	$240,000	$240,000	$240,000	$240,000	$240,000	$240,000	$240,000

Total cost over 7 years: $1,680,000

If this same organization took a 4-year break from SA, the model would look like this as they re-enter with License and Software Assurance (L&SA) in year 4. In this case, the organization would save money in years 1-4 but then be faced with rebuying the license entitlement as well as the SA.

Product	Year 1	Year 2	Year 3	Year4	Year 5	Year 6	Year 7
Office Professional L&SA					$430,000	$430,000	$430,000

Total cost over 7 years: $1,290,000

Now we want to show you what it would look like if the same organization takes a 4-year break and re-enters under the Office Professional Plus User Based Subscription licensing model. We will also make the assumption that they will roll out the latest version of Office to 1/3 of the organization per year starting in year 5.

Product	Year 1	Year 2	Year 3	Year4	Year 5	Year 6	Year 7
Office Professional User Based					$87,246 Quantity 666	$174,492 Quantity 1332	262,000 Quantity 2000

Total cost over 7 Years: $523,738

In this last model the organization re-enters at basically the SA renewal price and then matches their purchases to actually deployments. This means that they save hard dollars in years 1-6 compared to the traditional EA model.

Please note that every customer has different needs and requirements and one size does not fit all from a licensing perspective.

Contact MetrixData360 at info@metrixdata360.com or call us at 1-888-978-5129 ext. 703 to speak with an expert today!

***All pricing examples are taken from publicly available sources and may be subject to change without notice***

Microsoft Contract Negotiations Top 10 Tips from Gartner Conference

Posted on October 7, 2014June 26, 2024 by Ben Tight

MetrixData360 recently attended the Gartner It Financial, Procurement & Asset Management Summit in Orlando Florida. Here are tips that were shared with the approximate 600 people attended the event from companies that ranged from mid-sized organizations to the Fortune 500 on Microsoft Contract Negotiations.

I actually had the opportunity to present to a theatre audience my top 10 tips when negotiating a contract renewal or dealing with a Vendor Audit. Based on the sessions that I was able to attend and the conversations that I had with many of the attendees, I thought it would be good to provide you with my top 10 take-aways from the event.

10 Software Negotiation Tips

Vendor Sales Reps are highly trained to sell you licenses not value! They are trained to present to you high pricing proposals that include many products and “extras” that are not required, often going to high levels (CIO) within the organization to do so. These proposals often include more products then are needed (positioned for future projects) and are often presented by sales reps that do not have any authority to negotiate.
Vendor contracts are getting more and more complex and you need to start your renewal process earlier. Traditional on premise type agreements are being morphed into Cloud Based agreements and the T&Cs associated with these are not simple or easy to follow.
Cloud T&Cs are tough to negotiate. Many of the vendors refuse to negotiate on them. It is important for you to negotiate SLAs and penalties clauses if the SLAs are not met. Accepting the standard T&Cs and SLAs can put your organization at risk.
It is extremely important for you to include an escalation clause within your contract so that remedies are not discussed with low level account teams that really have no interest in assisting with remedies (that often are contrary to their quota and commission goals).
So-called Free Software is not Free in the long run. In many proposals, products are added in and then deeper discounts are provided to give the perception that they are free. Our analysis and comments by Gartner Analysts show that these free products can cost millions over the long run.
Transitions are not free. Similarly when a vendor changes their licensing Metrics, the transitions that the vendors provide are not free! You can see this in our blog post of SQL Server for instance where the transition from Processors to Cores can cost substantially more. Just take the simple example of a 2 Processor 8 Core Server where the price doubles (Based on requiring 2 Processors in the past and now requiring 16 Cores – the price of 2 Processors = 8 Cores, so 16 cores doubles the price).
The way that you count licenses may not be the way that they count licenses. Make sure it is clear the way that you are counting things like Qualified Devices or Qualified Users and that the vendor agrees. If you cannot get them to provide changes in writing within the contract, get emails that explain how they will count and keep those with your files in case of an audit. Remember: if it’s not in writing within your contract – it does not exist. A conversation with your vendor rep about how they “believe” it works, does not make it legal.
Audits are now the norm! Gartner (and us for that matter) have seen a rise in the number of vendor audits. It appears that most software vendors are auditing clients at a much higher frequency. In the conversations I had with attendees, greater than 50% have had at least one vendor audit them in the last 12 months. It’s not a matter of if you are audited – its a matter of when. Are you ready? Do you have the expertise and tools in place to ensure you are successful if you are audited?
IT sourcing/Finance and SAM are starting to become strategic functions within organizations. The leading companies have teams that work together with Procurement and IT to ensure that risks are mitigated in the contract and negotiation process.
Hire Experts (Like MetrixData360) to assist! Gartner says that you need to hire experts to help protect your interests. With each vendor you get an opportunity to negotiate once every 3 or so years. You need someone that can help you through the negotiation (or audit process) but who is also available to answer questions mid-stream in contracts (ask us about our retainer program).

Looking for More Information on Microsoft Negotiations?

Our Learning Center has plenty of information on the different types of negotiation you may face with Microsoft.

Negotiating an Enterprise Agreement?
Debating Between an Enterprise Agreement or CSP?
Wondering if Working from Home is Covered by Your Microsoft License?

Not Just Microsoft Negotiation Experts

While these tips were originally framed with Microsoft contract negotiations in mind, they apply to almost any software vendor you may find yourself negotiating with. Negotiating with software vendors is a stressful event for any business. Avoid the financial pitfalls of over-licensing or getting pulled into an up-sell that your organization will never use and will cost you more. With MetrixData360, you can traverse Microsoft contract negotiations – or negotiations with any software vendor – with the confidence of having an expert in your corner. Contact us today to set up a consultation to find out where MetrixData360 can save money for your organization’s IT budget.

Paying 20% More for your Software then you need to yet still being audited?

Posted on April 2, 2013June 26, 2024 by Ben Tight

Unveiling the Discrepancy: Exploring Over-Licensing Claims vs. Increasing Software Audits by Vendors

How is it that analysts such as Gartner and IDC make statements that most customers are over-licensed but software vendors are increasing the number of audits that they perform? It has been well documented for instance, that Microsoft will audit about 30,000 Enterprise customers in North America over the next 3 years.

The answer is actually quite simple. Software licensing is designed to be very confusing. So confusing that although most customers have good intentions when it comes to Software Asset Management (SAM) practices that one of two things happens: Continue reading “Paying 20% More for your Software then you need to yet still being audited?”

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Author: Ben Tight